corporate information · 2019. 7. 30. · syed dilawar abbas chairman mr. manzoor ahmed chairman...

Mr. Mahmood Zia Ahmad Managing DirectorSyed Dilawar Abbas Chairman

Mr. Manzoor Ahmed Chairman

Mr. Naveed Kamran Baloch Director

BOARD OF DIRECTORS

Qazi Mohammad Saleem Siddiqui Director

Dr. Sohail Razi Khan Director

COMMITTEES OF THE BOARD OF DIRECTORS

Sardar Ahmad Nawaz Sukhera Director

Mr. Manzoor Ahmed Director

FINANCE & PROCUREMENT COMMITTEE

Mirza Mahmood Ahmad Director

Mr. Ahmad Aqeel Director

Mian Misbah-ur-Rehman Director

Mr. Mustafa Ahmad Khan Director

Mr. Sher Afgan Khan Director

AUDIT COMMITTEE

Ms. Roohi Raees Khan Director

Mr. Himayat Ullah Khan Director

Mr. Ahmad Aqeel MemberMr. Himayat Ullah Khan Member Qazi Mohammad Saleem Siddiqui Member Mr. Mustafa Ahmad Khan Member

Ms. Roohi Raees Khan MemberMr. Naveed Kamran Baloch Member

Dr. Sohail Razi Khan Member

Mr. Sher Afgan Khan Member

Mirza Mahmood Ahmad Chairman

Mian Misbah-ur-Rehman Member


Mr. Ahmad Aqeel Member

HR & NOMINATION COMMITTEESyed Dilawar Abbas ChairmanMr. Mahmood Zia Ahmad Managing Director

Ms. Roohi Raees Khan Member

Mr. Mahmood Zia Ahmad Managing Director

Sardar Ahmad Nawaz Sukhera Member

Mr. Ahmad Aqeel MemberMirza Mahmood Ahmad MemberMr. Manzoor Ahmed MemberMian Misbah-ur-Rehman MemberMr. Mustafa Ahmad Khan Member

CONTROL COMMITTEEUNACCOUNTED FOR GAS (UFG)

Mr. Naveed Kamran Baloch Member


Mr. Himayat Ullah Khan Member



Mirza Mahmood Ahmad Member

Qazi Mohammad Saleem Siddiqui Chairman

Mr. Mustafa Ahmad Khan Member



Mirza Mahmood Ahmad Member

Mr. Ahmad Aqeel Chairman RISK MANAGEMENT COMMITTEE


COMPANY SECRETARY /

AUDITORS

Mr. Imtiaz Mehmood

Mezzanine Floor, South Tower, LSE Plaza,

Mian Misbah-ur-Rehman MemberQazi Mohammad Saleem Siddiqui Member

EY Ford Rhodes

LEGAL ADVISORS

CHIEF FINANCIAL OFFICERMr. Saghir-ul-Hassan Khan

Chartered Accountants

Website: www.cdcsrsl.com

Mr. Manzoor Ahmed Member


SECRETARY TOCOMMITTEES OF THE BOARD

SHARE REGISTRARCentral Depository Company of Pakistan Limited

19-Kayaban-e-Aiwan-e-Iqbal,Lahore-54000Tel: [+92-42] 36362061-66Fax: [+92-42] 36300072

Fax: [+92-42] 99201369, 99201302

REGISTERED OFFICE

M/s. Surridge & Beecheno

P.O. Box No. 56, Lahore-54000, PakistanGas House,21-Kashmir Road,

Tel: [+92-42] 99201451-60, 99201490-99

Website: www.sngpl.com.pk

Sui Northern Gas Pipelines Limited01

Corporate InformationAs on July 24, 2019

DIRECTORS’ REVIEW

The increase of profit in the period under review is attributable to increase in return on assets, due to increase in capitalization as a result of timely completion of projects of vital national importance during previous years. Moreover, due to continuous effort the increasing trend in Unaccounted For Gas(UFG) has been arrested, resultantly, the UFG percentage for period under review has decreased to 10.43% as compared to 10.74% for the corresponding period consequently the UFG disallowance has reduced to Rs 4,387 million as compared to Rs 5,523 million in the corresponding period. However, despite best efforts, your company is still facing UFG losses on Transmission and Distribution Network in Law & Order Affected, Oil & Gas Producing Southern Districts (Karak, Hangu, Kohat etc.) of KPK Province. In order to address this menace, the Company has planned to upgrade the Karak Office to execute different UFG control activities, as a result of which, the overall position of the UFG losses will further reduce.

PROJECTS

Despite all the economic challenges and financial constraints, the Company is striving hard for the consistent flow of profit. The Board of Directors, Management and staff of the Company are confident that performance of the Company will further enhance in the years ahead.

Projects Department has completed / commissioned 86.7 KMs Transmission Lines with diameters 6” to 12” including the contract lines and 440.16 KMs of Distribution Lines with diameters 1" to 18" were commisioned by 3rd Quarter of FY 2018-19 for enhancing system capacity, supplying gas to new towns and improving pressure to customers for achieving customer satisfaction. In view of acute energy crisis prevailing in the country, Government of Pakistan aggressively pursued the import of 1200 MMCFD LNG into the country to meet shortfall in gas supplies and so far 1000 -1100 MMCFD RLNG has been injected into system. The Company has completed / commissioned the following:

(i) its system augmentation project for the transportation of 1200 MMCFD RLNG into its system.

(ii) spur lines laying jobs of three power plants at Bhikki, Haveli Bahadur Shah and Balloki of consolidated 3600 MW capacity for supplying 200 MMCFD RLNG to each power plant.

We are pleased to present the un-audited financial statements for the 3rd Quarter ended March 31, 2019. During the period under review, your Company has earned profit after tax amounting to Rs 7,819 million against a profit of Rs 5,981 million for the corresponding period. The earnings per share for the period was Rs 12.33 as against earnings per share of Rs 9.43 for the period ended March 31, 2018.

Your Company has also completed infrastructure required to supply 700 MMCFD RLNG to new RLNG based power plants constructed in Punjab. After the completion of system augmentation Project, your Company has been able to transport 1200 to 1500 MMCFD RLNG gas into the system.

(iii) the pipeline infrastructure development works for supplying gas to Nandipur power plant.

Moreover, SNGPL is also undertaking 24" dia x 93 KM spur line job for supply of 200 MMCFD RLNG to Punjab Power Plant near Trimmu Barrage, District Jhang, of 1400 MW capacity on 100 % cost sharing basis. The works on the project have been initiated which are likely to be completed by August 2019.


FUTURE OUTLOOK

As per direction of Government of Pakistan, SNGPL has planned new 42”dia x 770 KM pipeline project to build another 1200 MMCFD pipeline capacity in its franchise areas from Sawan to Lahore for upcoming LNG terminals in the country keeping in view the diminishing indigenous gas supply resources for meeting the increasing gas demand of all sectors, whereas pipeline from Karachi to Sawan shall be built by SSGC. Your company is also engaged in supplying 200 MMCFD gas to new RLNG based Power Plant, being constructed near Trimmu, District Jhang in Punjab. However, after the completion of new project i.e. 42”dia x 770 KM Pipeline Project along with 89,750 HP compression, your Company shall be able to transport further 1200 MMCFD RLNG from Sawan to Lahore. The Board of Directors has granted conceptual approval of the project. Economic Coordination Committee (ECC) of the cabinet has also approved the financial model of the Project. At present, the Company has sought GOP (Petroleum Division)'s guarantee of necessary arrangements for entire capacity utilization of the project.

ACKNOWLEDGEMENTS

BUSINESS DEVELOPMENT

The Company is engaged in various pipeline construction projects of national and multinational companies. SNGPL is undertaking pipeline engineering and construction jobs of MOL Pakistan's flow line / trunk lines and Fiber Optic Cable in District Kohat / Hangu for different gas fields of MOL Pakistan like Maramzai, Manzalai, Mamikhel, Makori Deep-1, Tolanj West and Makori for the last fifteen years. MOL Pakistan has played a very vital role in strengthening the gas input supplies. MOL Pakistan is presently working on Mardankhel-3 well and has awarded the project of 8" dia x 7.5 KM pipeline laying from Mardankhel-3 well to Mardankhel-1 flow line for onward processing at CPF which is under progress. The completion of Mardankhel-3 project will inject additional 10-15 MMCFD gas into SNGPL's system that would be quite instrumental in reducing the energy deficiency in the country. Lately, SNGPL has also completed MOL Pakistan's pipeline construction jobs of 6"dia x 6 Km & 12”/10”dia x 22 KM pipeline for Mardankhel-2 & Mardankhel-1 wells respectively, which has resulted in injection of additional 40-50 MMCFD gas into SNGPL's system.

The Directors place on record their appreciation for the Government of Pakistan, Ministry of Energy (Petroleum Division), Oil & Gas Regulatory Authority, other Government and Non-Government Institutions related to the Company for their sustained support and the employees of the Company for their dedication and hard work during the period under review.


LahoreDated: July 24, 2019

On behalf of the Board

(Syed Dilawar Abbas) Chairman-BOD

(Mahmood Zia Ahmad) Managing Director/CEO

Condensed Interim Statement of Financial Position (Un audited) As at March 31, 2019-

Un-auditedMarch 31,

2019

AuditedJune 30,

2018

NoteEQUITY AND LIABILITIES

SHARE CAPITAL AND RESERVESAuthorised share capital 1,500,000,000 ordinary shares of Rs 10 each

Issued, subscribed and paid up share capital 634,216,665 (June 30, 2018; 634,216,665) ordinary shares of Rs 10 each

Revenue reserves

NON-CURRENT LIABILITIES

Long term financing:-Secured

5-UnsecuredSecurity depositsDeferred creditDeferred taxation

CURRENT LIABILITIES

Trade and other payables

Interest and mark-up accrued on7loans and other payables

Short term borrowing-securedCurrent portion of long term financing

8

CONTINGENCIES AND COMMITMENTS

9

6

Employee benefits

15,000,000

6,342,167

12,334,514

18,676,681

50,420,000 415,232

43,782,459 57,854,554

1,676,766

161,766,344

233,679,577

111,462

31,363,988

280,714,218

461,157,243

7,617,333

15,000,000

6,342,167

43,675,000 363,084

47,264,084 60,723,765

2,614,160 7,697,928

162,338,021

300,388,570

105,181

46,012,919

387,051,813


(Rupees in thousand)

Shareholders' equity

4

(June 30, 2018 1,500,000,000 ordinary share of Rs 10 each)

3,986,546 23,904,814 11,572,645 12,169,102

Unpaid DividendUnclaimed Dividend

10

- 4,471,227

The annexed notes from 1 to 31 form an integral part of these condensed interim financial statements.

(Saghir-ul-Hassan Khan)Chief Financial Officer

15,682,739

22,024,906

571,414,740

ASSETS

NON-CURRENT ASSETS

Property, plant and equipment 11Intangible assetsLong term investmentLong term loansEmployee benefitsLong term deposits and prepayments

CURRENT ASSETS

Stores and spare partsStock in trade Trade debts 13Loans and advances 14Trade deposits and short term prepayments 15Accrued interestOther receivables 16Sales tax recoverableIncome tax receivableCash and bank balances 17

193,381,120 149,344

4,900 828,069

2,568,860 38,828

196,971,121

4,736,010 6,727,847

129,087,343 2,881,803

432,282 9,754

39,004,453 1,014,485 6,733,492

190,609,690 116,432

4,900 818,832

2,488,638 24,527

194,063,019

3,832,525 31,404,569 66,314,600 1,260,945

226,212 16,585

122,338,162 33,513,780

267,094,224

461,157,243

Note

1,111,813 7,075,033

12



Un-auditedMarch 31,

2019

AuditedJune 30,

2018



Condensed Interim Statement of Financial Position (Un audited) As at March 31, 2019-

183,816,150

374,443,619

571,414,740

Condensed Interim Statement of Profit or Loss (Un audited) for the Nine Months Ended March 31, 2019-

Gas sales

Add: Differential margins

Less: Cost of gas sales

18

Gross profit

Add: Other operating income 21

Less: Operating expenses:Selling costAdministrative expensesOther operating expenses 22

Operating profit

Less: Finance cost

Profit before taxationTaxation

23

Profit for the period

Earnings per share - basic and diluted (Rupees)

489,244,370

514,688,135

12,799,001

4,739,714 5,151,193 2,219,423

12,110,330

17,422,058

293,516,917

44,291,315

337,808,232

323,025,044

14,783,188

10,491,304

25,274,492

3,702,667 4,947,904 1,638,334

10,288,905

14,985,587

6,393,637

8,591,950 2,611,399

5,980,551

9.43


Nine Months ended

March31, 2018

March31, 2019

Note

137,921,959

151,085,432

4,750,039

966,391 1,596,986 518,759

3,082,136

7,052,961

117,505,835

15,779,508

133,285,343

129,211,727

4,073,616

5,007,510

9,081,126

1,337,706 1,722,845 660,874

3,721,425

5,359,701

2,329,421

3,030,280 908,917

2,121,363

3.34

Quarter ended

March31, 2018

March31, 2019

24



159,447,757

871,580

19

20




53,559,20621,525,798

28,115,4418,362,325

542,803,576

40,914,44213,112,364

28,804,11210,030,228

11,382,0542,977,267 3,562,602

2,105,687 7,819,452

3.32 12.33

Condensed Interim Statement of Comprehensive Income (Un audited) for the Nine Months Ended March 31, 2019-

Nine months endedQuarter ended

March31, 2018

March31, 2018

March31, 2019

March31, 2019

Profit for the period

Other comprehensive income for the period:

Items that will not be reclassified to profit

or loss:

Remeasurement of defined benefit plans - net

Tariff adjustment with respect to

remeasurement of IAS-19

Tariff adjustment with respect to

remeasurement of IAS-19 for FY 2016-17

Tax effect

Items that may subsequently be reclassified

to profit or loss

Total comprehensive income for the period

2,105,687 5,980,551 2,121,363

7,696,589 3,837,401

-

-


-

-

-

2,451,483

(735,445)



2,451,483

(735,445)

- - --

-

-

- 2,451,483

(2,603,061)

2,603,061

2,451,483

-

-

-

-




7,819,452

2,105,687 7,819,452

CASH FLOWS FROM OPERATING ACTIVITIES

Cash generated from operations 25Finance cost paidIncome taxes paidEmployee benefits paid/contributions paid Security deposits received Receipts against government grants

and consumer contributionsLong term loans to employees Long term deposits and prepayments

Net cash inflow from operating activities

CASH FLOWS FROM INVESTING ACTIVITIESCapital expenditure on property, plant and equipment

Proceeds from sale of property, plant and equipment Return on bank deposits

Net cash used in investing activities

Proceeds from long term financing- secured Repayment of long term financing - securedDividend paid

Net cash (outflow) / inflow from financing activities

Net decrease in cash and cash equivalents

Cash and cash equivalentsat the beginning of the period

Cash and cash equivalents atthe end of the period 25.2

Condensed Interim Statement of Cash Flows (Un audited)-for the Nine Months Ended March 31, 2019

NoteMarch 31,

2019March 31,

2018


Capital expenditure on Intangible assets

Repayment of long term financing - unsecured

14,571,044 (2,656,870) (485,034) (3,824,566) 3,942,160

11,522,181 (445,367) (6,235)

22,617,313

(28,051,712) (25,433) 36,710 236,555

(27,803,880)

(8,891) 12,150,200

(2,457,500) (4,714,459)

4,969,350

(217,217)

2,648,524

2,431,307

(2,813,851) (2,527,880) (1,599,699) 3,481,625

4,857,409 (25,877) (14,301)

(16,802,465) (101,969) 48,580 227,642

(16,628,212)

(274,073) -

(5,945,000) (6,281)

(6,225,354)

(20,259,809)

3,088,487

(17,171,322)



2,593,757

1,236,331




CASH FLOWS FROM FINANCING ACTIVITIES

Condensed Interim Statement of Changes in Equity (Un audited)-for the Nine Months Ended March 31, 2019

Balance as at July 01, 2017 (Audited) 6,342,167 4,127,682 480,000 (354,056) 4,253,626

Final dividend for the year ended June 30, 2017 @ Rupees 6.00 per share Interim dividend for the first quarter ended September 30, 2017 @ Rupees 1.50 per share

Balance as at 31 March

Balance as at March 31, 2019 (Un-audited) 6,342,167 4,127,682 480,000


-)))))

-)))))

-)))))

-)))))

-)))))

-)))))

(3,805,300)

(951,325)

(3,805,300)

(951,325)

10,595,793

(3,805,300)

(951,325)

Final dividend for the year ended June 30, 2018 @ Rupees 5.55 per shareInterim dividend for the first quarter ended September 30, 2018 @ Rupees 1.50 per share


ShareCapital General

Reserve

DividendEqualization

Reserve

Unapprop-riated

(Loss) / Profit

Revenue Reserves

Total

Total share holders' equity

( R u p e e s i n t h o u s a n d )

Total transactions with owners, recognised directly in equity

Total comprehensive income from July 01,2017 to March 31, 2018

2018 (Un-audited)

-))))) -))))) -))))) 7,696,589

-))))) -))))) -))))) (4,756,625) (4,756,625) (4,756,625)

7,696,589 7,696,589

Balance as at July 01, 2018 (Audited) 6,342,167 4,127,682 480,000 7,726,832 12,334,514 18,676,681

Total transactions with owners, recognised directly in equity -

-

-)))))

-)))))

-)))))

-)))))

-)))))

-)))))

(3,519,902)

(951,325)

(3,519,902)

(951,325)

(3,519,902)

(951,325)

-))))) -))))) -))))) (4,471,227) (4,471,227) (4,471,227)

Total comprehensive income from July 01, 2018 to March 31, 2019

6,342,167 4,127,682 480,000 2,585,908 7,193,590 13,535,757




-))))) -))))) -))))) 7,819,452 7,819,452 7,819,452

11,075,057 15,682,739 22,024,906

Selected Notes to and forming part of the Condensed Interim Financial Statements (un audited) -

1. THE COMPANY AND ITS OPERATIONS

1.1 Sui Northern Gas Pipelines Limited (the Company) is a public limited company incorporated in Pakistan under the Companies Act,1913 (now Companies Act, 2017) and listed on the Pakistan Stock Exchange Limited. The principal activity of the Company is the purchase, transmission, distribution and supply of natural gas. The registered office of the Company is situated at 21 Kashmir Road, Lahore. The Company's pipe coating plant is situated at Uch Sharif, Bahawalpur. The addresses of other regional offices of the company are as follows:

for the Nine Months Ended March 31, 2019


Region Address

Abbottabad

Bahawalpur

Faisalabad

Gujranwala

Sialkot

Gujrat

Islamabad

Rawalpindi

Lahore (East and West)

Multan

Peshawar

Mardan

Sahiwal

Sargodha

Sheikupura

WAH

Jub Pul. PO Jhangi, Main Manshera Road, Abbottabad.

6-A-D, Model Town-A, Bahawalpur.

Sargodha Road, Faisalabad.

M.A. Jinnah Road, Gujranwala.

Wahid Road, Malkay Kalan, Off. Marala Road, Sialkot.

State life building, 120 & 121. G.T. Road, Gujrat.

Plot No. 28-30, I-9 Industrial Area, Islamabad.

Al-Mansha Plaza, Opp. LESCO Office, Main G.T. Road, Rawalpindi.

21-Industrial Area, Gulberg-III, Lahore.

Piran Ghaib Road, Multan.

Plot No. 33, Sector B-2M, Hayatabad, Peshawar.

Riffat Mehal, Near Mardan Industrial Estate, Main Nowshera Road, Mardan.

79-A, 79-B Canal Colony, Sahiwal.

H. No. 15, Muslim Town, Sargodha.

Main Sargodha Road, Near Punjab College, Sheikhupura.

Gudwal Link Road, Wah Cantt

3.1 The accounting policies adopted for the preparation of these condensed interim financial statements are the same as those applied in the preparation of the preceding annual financial statements of the company for the year ended June 30, 2018 except for the following:

The Company has adopted IFRS 15 from July 01, 2018. IFRS 15 supersedes IAS 11 Construction

2. BASIS OF PREPARATION 2.1 These condensed interim financial statements have been prepared in accordance with the

accounting and reporting standards as applicable in Pakistan for interim financial reporting. The accounting and reporting standards as applicable in Pakistan for interim financial reporting comprise of:

- Provisions of and directives issued under the Companies Act, 2017.

1.2 These condensed interim financial statements are presented in Pak Rupee, which is the company's functional and presentation currency.

- International Accounting Standard (IAS) 34, Interim Financial Reporting, issued by the International Accounting Standards Board (IASB) as notified under the Companies Act, 2017; and

Where provisions of and directives issued under the Companies Act, 2017 differ with the requirements of IAS 34, the provisions of and directives issued under the Companies Act, 2017 have been followed.

2.2 These condensed interim financial statements are un-audited and are being submitted to the shareholders as required by section 237 of the Companies Act, 2017 and the Listing Regulations of the Pakistan Stock Exchange Limited.

2.3 These condensed interim financial statements do not include all the information required for annual financial statements and therefore, should be read in conjunction with the annual financial statements of the Company for the year ended 30 June 2018.

3. ACCOUNTING POLICIES AND ESTIMATES

IFRS 15 Revenue from Contracts with Customers


Contracts, IAS 18 Revenue, IFRIC 18 Transfer of Assets from Customers and related Interpretations and it applies to all revenue arising from contracts with customers, unless those contracts are in the scope of other standards. The standard provides a single comprehensive model for revenue recognition. The core principle of the standard is that an entity shall recognize revenue to depict the transfer of promised goods or services to customers at an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The standard introduced a new contract-based revenue recognition model with a measurement approach that is based on an allocation of the transaction price. Credit risk is presented separately as an expense rather than adjusted against revenue. Contracts with customers are presented in an Company's statement of financial position as a contract liability, a contract asset, or a receivable, depending on the relationship between the Company's performance and the customer's payment. Customer acquisition costs and costs to fulfil a contract can, subject to certain criteria, be capitalized as an asset and amortized over the contract period.

Key changes in accounting policies resulting from application of IFRS 15

The standard requires companies to exercise judgement, taking into consideration all of the relevant facts and circumstances when applying each step of the model to contracts with their customers. The standard also specifies the accounting for the incremental costs of obtaining a contract and the costs directly related to fulfilling a contract.

(ii) Meter rentals are recognized on a monthly basis, at specified rates by OGRA for various categories of consumers.

(vii) Income on the urgent fee is recognized when the performance obligation as per the terms of contract agreed with consumer is completed.

Revenue is recognized at an amount that reflects the consideration to which the Company is expected to be entitled in exchange for transferring goods or services to a customer. For each contract with a customer, the Company: identifies the contract with a customer; identifies the performance obligations in the contract; determines the transaction price which takes into account estimates of variable consideration and the time value of money; allocates the transaction price to the separate performance obligations on the basis of the relative stand-alone selling price of each distinct goods or services to be delivered; and recognizes revenue when or as each performance obligation is satisfied in a manner that depicts the transfer to the customer of the goods or services promised.

(iv) Return on bank deposits is accrued on a time proportion basis by reference to the principal outstanding and applicable rate of return.

The adoption of revenue recognition standard did not have a material impact on amounts in statement of profit or loss, statement of other comprehensive income, statement of cash flows or earnings per share for the prior period as the Company's main business is sale of gas which includes only one performance obligation i.e. supply of gas.

3.2 The preparation of this condensed interim financial statements require management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expense i.e. Workers' Profit Participation Fund and Taxation which are subject to final adjustments in the annual audited financial statements. Actual results may differ from these estimates. The significant judgments made by management in applying the Company's accounting policies and the key sources of estimation uncertainty were the same as those that were applied to the financial statements for the year ended 30 June 2018.

IAS 39 (Financial Instruments: Recognition and Measurement) has been replaced after the adoption of IFRS 9 (Financial Instruments). However, allowed by SECP vide its S.R.O 299 (I)/2007, the effective date for the applicability will be for the reporting period/Year ending on or after June, 30 2019 (earlier application is premitted).

(v) Take or Pay income is recognized when the consumers are unable to consume the committed volume of gas by the agreed date as per the terms of Gas Supply Agreement (GSA) with the consumer.

(vi) Income on the construction contracts is recognized over time by reference to the progress towards complete satisfaction of the relevant performance obligation. The Company uses percentage of completion method to determine the inflow of economic benefits.

(i) Revenue from gas sales is recognized on the basis of gas supplied to consumers at the rates fixed by Oil and Gas Regulatory Authority (OGRA). Accruals are made to account for the estimated gas supplied between the date of last meter reading and the year end.

(iii) Interest on gas sales arrears and surcharge on late payment is calculated from the date the billed amount is overdue and recognized when it is probable that economic benefits will flow to the entity.

IFRS 9 Financial Instruments

Note

Un-auditedMarch 31,

2019

AuditedJune 30,

2018

4. LONG TERM FINANCING - SECURED

Local currency - Syndicate term finance - I

Local currency - Syndicate term finance - II

Less: Current portion shown under current liabilities

8,190,000

26,449,778

34,639,778

2,062,500

4,200,000

13,862,722

800,000

55,565,000

(11,890,000)

43,675,000

9,360,000

28,213,097

37,573,097

2,750,000

4,800,000

14,786,903

1,600,000

61,510,000

(11,090,000)

50,420,000

4.1

4.2

Islamic finance under musharaka arrangementIslamic finance under musharaka arrangement Islamic finance under lease arrangement for LNG Project Phase-IIIslamic finance under musharaka arrangement

4.3.1

4.3.2

4.3.3

9

4.3.4


From banking companies

Other loans

4.1

Syndicate of banks 10 half yearly intalments

May 19, 2022 Six months KIBOR+ 0.70% per annum

Lender Mark-up rate No. of instalments Maturity date

Syndicate term finance I

This loan has been obtained from a syndicate of banks (with Bank Alfalah acting as the Agent and United Bank Limited acting as the Security Trustee) and is secured by a first pari passu created by way of hypothecation over all present and future movable fixed assets of the Company (excluding land and building) to the extent of Rs 15,600,000 thousand (June 30, 2018: Rs 15,600,000 thousand). The effective mark-up charged during the period ranges from 7.21 % to 10.60% per annum (June 30, 2018: 7 % to 7.21% per annum).

4.2


08 June 2026 Six months KIBOR+ 1.10% per annum


Syndicate term finance Il

This loan has been obtained from a syndicate of banks (with Habib Bank Limited acting as the Agent) and is secured by a first pari passu charge created by way of hypothecation over all present and future movable fixed Regassified Liquefied Natural Gas (RLNG) assets of the Company to the extent of Rs 35,870,000 thousand (June 30, 2018: Rs 35,870,000 thousand) relating to the project and a sovereign guarantee of the Government of Pakistan. The effective mark-up charged during the period ranges from 8.04 % to 11.67% per annum (June 30, 2018: 7.26 % to 8.03% per annum).

4.3




Arrangements under Islamic financing

This loan has been obtained from a syndicate of banks (with Al Baraka Bank Limited acting as the Investment Agent) and is secured by a first pari passu charge created by way of hypothecation over movable fixed assets of the Company (excluding land and building) to the extent of Rs 7,333,333 thousand (June 30, 2018: Rs 7,333,333 thousand). The effective mark-up charged during the period ranges from 7.59 % to 11.35% per annum (June 30, 2018: 6.69 % to 7.59% per annum).

4.3.1


4.3.2


19 May 2022 Six months KIBOR+ 0.70% per annum


This loan has been obtained from a syndicate of banks (with Bank Alfalah acting as the Investment Agent) and is secured by a first pari passu charge created by way of hypothecation over movable fixed assets of the Company (excluding land and building) to the extent of Rs 8,000,000 thousand (June 30, 2018: Rs 8,000,000 thousand). The effective mark-up charged during the period ranges from 7.21 % to 10.60% per annum (June 30, 2018: 7 % to 7.21% per annum).

4.3.3




This loan has been obtained from a syndicate of banks (with Habib Bank Limited acting as the Agent) and is secured by a first pari passu charge created by way of hypothecation over all present and future movable fixed RLNG assets of the Company to the extent of Rs 18,800,000 thousand (June 30, 2018: Rs 18,800,000 thousand) relating to the project and the sovereign guarantee of Government of Pakistan. The effective mark-up charged during the period ranges from 8.04 % to 11.67% per annum (June 30, 2018: 7.26 % to 8.03% per annum).

4.3.4

Allied Bank Limited 4 half yearly intalments

28 September 2019

Six months KIBOR- 0.12% per annum


This loan has been obtained from Allied Bank Limited and is secured by a first pari passu charge created by way of hypothecation over all present and future movable fixed assets of the Company (excluding Assets of RLNG Project) to the extent of Rs 3,094,667 thousand (June 30, 2018: Rs 3,094,667 thousand). The effective mark-up charged during the period ranges from 6.44 % to 8.16% per annum (June 30, 2018: 6.05 % to 6.44 % per annum).

Un-auditedMarch 31,

2019

AuditedJune 30,

2018

5. LONG TERM FINANCING - UNSECURED

Other loans - Local currency:

Less: Current portion shown under current liabilities (279,102) (482,645)

363,084 415,232

These loans carry effective mark-up at variable rates which ranges from 6.55% per annum to 14.24% per annum (June 30, 2018: 6.55% per annum to 14.47% per annum).

642,186 897,877

5.1

Note

9


6. TRADE AND OTHER PAYABLESCreditors for:

Gas 284,844,234 1,221,824 7,549,816 160,702

- 349,825 155,505

3,098,940 424,123 91,937

- -

2,491,664

300,388,570

207,456,506 Supplies 1,400,122

Accrued liabilities 11,675,679

Gas infrastructure development cess payable 42,439

Interest free deposits repayable on demand 727,809 Earnest money received from contractors 130,463 Mobilization and other advances 3,184,518 Advances from customers 7,925 Due to customers 68,066

2,640,675

1,892,608

RLNG differential margin Gas swapping deferral account

233,679,577

4,012,899

Provident fund 439,868

6.1

6.2


Un-auditedMarch 31,

2019

AuditedJune 30,

2018

Note


Workers' Profit Participation Fund


An order on the subject matter was also passed by the Peshawar High Court vide its judgment dated June 13, 2013 whereby the Court declared the GIDC Act 2011 as ultra vires to the Constitution. An appeal was filed in the Supreme Court of Pakistan, which vide its order dated December 30, 2013 suspended the judgment of Peshawar High Court. On December 31, 2013, OGRA issued a notification directing levy of GIDC at revised rates.

The Honorable Islamabad High Court vide its decision dated January 31, 2013, declared Gas Infrastructure Development Cess Act (GIDC), 2011 as ultra vires to the Constitution and directed the Company to adjust the amount already received on this account in the future bills of the petitioners. However, the Honorable Islamabad High Court vide its decision dated March 18, 2013, directed that neither the appellant shall recover the disputed amount from the respondents, nor the amount which has become payable to the respondents on the basis of impugned judgment shall be paid back to the respondents.

Furthermore, principal amount of GIDC amounting to Rs 136,264,789 thousand (June 30, 2018: Rs 130,606,731 thousand) is recoverable from consumers and payable to Government of Pakistan. These financial statements do not reflect the said amounts since the provisions of the GIDC Act require the Company to pay GIDC as and when the same is collected from consumers. Furthermore, such consumers have obtained stay orders against recovery of the same and consequently in view of the legal advisors of the Company, the Company is not liable to pay such amounts until the same are recovered. Both the principal amount and sales tax on GIDC will be shown as payable as and when these balances are collected from consumers.

In September 2014, a GIDC Ordinance was issued by President of Pakistan, pursuant to which, on directions of OGRA, the Company charged GIDC from its consumers with effect from September 2014. The Ordinance was superseded by GIDC Act 2015 passed by Parliament of Pakistan. The Act ratified the preceding GIDC Act 2011 and GIDC Ordinance 2014 and its provisions. However, a special Committee has been constituted by the Parliament to decide on previous arrears of GIDC due from customers and to make recommendations for removal of any anomalies in the GIDC Act. Based on the report of the sub-committee of the special committee requisite amendment in GIDC Act 2015 had already been laid in the Senate through GIDC amendment Bill and the same was referred to the Senate Standing Committee on Energy. However, a number of consumers of the Company contested and have obtained stay order from various Courts against recovery of GIDC. During the FY 2017-18, certain amendments were introduced in GIDC Act, 2015 through GIDC (Amendment) Act, 2018, which inter alia include change in effective date for applicability of mark-up on delayed payments of GIDC and a settlement option for CNG consumers for GIDC payable pertaining to the period January 1, 2012 and May 21, 2015, subject to agreement with the Company.

Included in trade payables is an amount of Rs 54,591,118 thousand (2018: Rs 12,350,792 thousand) and Rs 16,105,610 thousand (2018: Rs 10,222,060 thousand) due to Pakistan State Oil (PSO) and Pakistan LNG Limited (PLL) respectively representing payable against Liquefied Natural Gas (LNG) supplied by them. In this regard, the agreement for the supply of LNG between the parties has not yet been finalized and is under negotiation. Additional liability or adjustment, if any, that may arise would be recorded accordingly on the finalization of the agreement.

6.1

6.2

AuditedJune 30, 2018

Un-auditedMarch 31, 2019

Note

(Rupees in thousand)7. INTEREST AND MARK-UP ACCRUED ON

LOANS AND OTHER PAYABLESAccrued mark-up / interest on:

46,012,920 31,363,988

Long term financing - secured 2,007,457 365,245 Long term financing - unsecured 237,680 300,233

Short term borrowing - secured 204,260 45,661 Deposits from customers 2,037,246 1,320,833

Late payment of gas creditors and gas 41,526,277 29,332,016 devoplement surcharge

8. SHORT TERM BORROWING - secured

23,904,814 3,986,546

Allied Bank Limited 2,523,496 2,348,352 Bank Alfalah Limited 1,381,317 1,638,194

Allied Bank Limited 5,000,002 - Askari Bank Limited 2,499,999 -

Habib Bank Limited 6,500,000 - National Bank of Pakistan 6,000,000 -

8.18.2

8.38.4

8.58.6


This is a short term running finance facility from Bank Alfalah Limited amounting to Rs 2,500,000 thousand (June 30, 2018: Rs 2,500,000 thousand). This facility carries mark-up at the rate of 3 months KIBOR per annum (June 30, 2018: 3 months KIBOR per annum) on the balance outstanding. This is secured by way of ranking charge over current assets of the Company to the extent of Rs 3,333,334 thousand (June 30, 2018: Rs 3,333,334 thousand). Mark-up is payable on quarterly basis. The effective interest rate during the period ranges from 6.93% to 10.55 per annum (June 30, 2018: 6.41% per annum).

This is a short term running finance facility of Rs 4,000,000 thousand (June 30, 2018: Rs 4,000,000 thousand). This facility carries mark-up at the rate of 3 months KIBOR (June 30, 2018: 3 months KIBOR) on the balance outstanding. This is secured by way of first pari pasu charge over current assets of the Company to the extent of Rs 1,333,330 thousand (June 30, 2018: Rs 1,333,330 thousand) and ranking charge over current assets of the Company to the extent of Rs 4,000,000 thousand (2018: Rs 4,000,000 thousand). Mark-up is payable on quarterly basis. The effective interest rate during the period ranges from 6.92% to 10.55% per annum (June 30, 2018: 6.29% to 6.50%) per annum.

During the period Company has obtained a short term running finance facility of Rs 5,000,000 thousand from Allied Bank Limited. This facility carries mark-up at the rate of 3 months KIBOR + 0.50% per annum on the balance outstanding. This is secured by way of ranking charge over current assets of the Company to the extent of Rs 6,666,667 thousand. Mark-up is payable on quarterly basis. The effective interest rate during the period is 11.28% per annum.

During the period Company has obtained the short term running finance facility of Rs 2,500,000 thousand from Askari Bank Linited. This facility carries mark-up at the rate of 3 months KIBOR + 0.50% per annum on the balance outstanding. This is secured by way of ranking charge over current assets of the Company to the extent of Rs 3,333,334 thousand. Mark-up is payable on quarterly basis. The effective interest rate during the period is 11.25% per annum.

During the period Company has obtained a short term running finance facility of Rs 6,500,000 thousand from Habib Bank Linited. This facility carries mark-up at the rate of 1 months KIBOR + 0.50% per annum on the balance outstanding. This is secured by way of ranking charge over current assets of the Company to the extent of Rs 8,666,667 thousand. Mark-up is payable on quarterly basis. The effective interest rate during the period is 11.21% per annum.

During the period Company has obtained a short term running finance facility of Rs 6,000,000 thousand from National Bank of Pakistan. This facility carries mark-up at the rate of 3 months KIBOR + 0.50% per annum on the balance outstanding. This is secured by way of ranking charge over current assets of the Company to the extent of Rs 8,000,000 thousand. Mark-up is payable on quarterly basis. The effective interest rate during the period is 11.23% per annum.

8.1

9. CURRENT PORTION OF LONG TERM FINANCING

Long term financing - secured 11,890,000 11,090,000

12,169,102 11,572,645



Long term financing - unsecured 279,102 482,645

Note

4

5


8.2

8.3

8.4

8.5

8.6

10. CONTINGENCIES AND COMMITMENTS

Contingencies10.1

There is no significant change in contingencies from the preceding audited financial statements of the Company for the year ended June 30, 2018.

Un-audited AuditedMarch 31, 2019 June 30, 2018

b) Other Commitments

10.2 Commitments:a) Capital Commitments

Property, plant and equipmentIntangible assetsStores and spares

1,069,812 29,867 17,253,964

18,353,643

726,866

18,807,688

684,443

636,879 29,307

18,141,502



11. Property, plant and equipment

Opening book value Additions during the period/year

Book value of PPE disposed off during the period/year Book value of PPE transferred to CWIP during the period/year

Depreciation charged during the period/year

Closing book valueCapital work-in-progress

140,804,573 47,760,232

188,564,805

(38,221)

(17,116,996)

(17,158,227)

171,406,578 19,203,112

190,609,690

11.3

Operating fixed assets Tangible

171,406,578 13,097,489

184,504,067

-

(14,165,497)

170,338,570 23,042,550

193,381,120

(14,164,475)

Additions during the period / year Freehold land Buildings and civil construction on freehold land Buildings on leasehold land Transmission system Distribution systems Consumer meter and town border stations Telecommunication system and facilities

- 345,869 11.1

(3,010) (1,022)11.2

11.1

Plant and machinery & Compressor stations and equipment Furniture and equipment Computers and ancillary equipment Transport vehicles Tools and accessories

616 156,673 - 10,855

1,284,002 17,957,963 7,805,186 19,833,525 3,114,740 6,856,534 31,339 110,170 394,785 1,334,154 58,476 66,133 132,373 290,363 251,973 746,173 23,999 51,820

13,097,489 47,760,232

Disposals during the period / year Transport vehicles Plant and machinery Computers and ancillary equipment Furniture and equipment

1,009 1,902 11.2

13 48 - 182

878

1,022

-

3,010

Un-audited AuditedMarch 31, 2019 June 30, 2018


CAPITAL WORK-IN-PROGRESS

Transmission systemDistribution systemStores and spares including in transit Rs 151,674 thousand (June 30, 2018: Rs 1,325,451 thousand) Advances for land and other capital expenditure

11.3

5,457,727 9,860,390

7,409,079

2,076,420 8,718,932

7,819,285 315,354

23,042,550

588,475

19,203,112

Note

12. STOCK-IN-TRADE

- Gas in FSRU - Held with third parties

12.1- Gas in pipelines

2,328,207 -

6,727,847

1,672,953 26,519,892

31,404,569

4,399,640 3,211,724

12.1 This represents gas purchased by the Company that is yet to be delivered by Engro Elengy Terminal (Private) Limited ('EETL').


13. TRADE DEBTSConsidered goodSecuredUnsecured Accrued gas sales

Considered doubtful

Less: Provision for doubtful debts

55,658,108 73,604,619 (175,384)

129,087,343

22,134,939

151,222,282 (22,134,939)

129,087,343

40,870,650 25,658,877 (214,927)

66,314,600

21,202,850

87,517,450 (21,202,850)

66,314,600

13.1



Note


The Company, under the terms of the license granted to it by OGRA, the guidelines issued by the Federal Government vide decision of the Economic Coordination Committee of the Cabinet (“ECC”) dated May 11, 2018, and as per determination of Final Revenue Requirement of the Company for FY 2017-18 (“FRR 2017-18”) dated January 15, 2019, operates under a fixed rate of return regime. In case the decision of the Expert is not in favour of the Company or is partially in favour of the Company, and the Company has exhausted its legal remedies available under the law, the matter will be taken up with OGRA for determining the cost of the same to the Company in its revenue requirement decision. However, due to guaranteed return available under the said fixed rate regime, the Company does not expect any material loss.

In aggregate, the Company has recognized revenue of Rs 23,838 million under Take or Pay (“ToP”) arrangements from July 01, 2017 to March 31, 2019 out of which Rs 6,660 million has been recognized during the period. This comprises of Rs 12,184 million from M/s Quaid-e-Azam Thermal Power (Private) Limited (“QATPL”) and Rs 11,654 million from M/s National Power Parks Management Company Limited (“NPPMCL”) (collectively referred to as Government Power Producers (“GPPs”)).

The Company entered into Gas Supply Agreements (“GSAs”) for supply of RLNG to GPPs. Under clause 3.6 of the respective GSAs, the GPPs shall take and if not taken, pay for the unutilized gas on account of Take or Pay (“ToP”) arrangements. If the GPPs do not fully utilize the ToP quantity, they can request the Company to divert any unutilized quantity to other power plants, after seeking their consent. In case the power plants refuse or the Company, due to technical constraints or other reasons, is unable to supply the unutilized quantity to the power plants, it can divert that quantity to any of its consumers. The amounts recovered from these consumers, after deduction of any additional charges incurred by the Company in arranging the sale is required to be paid to the GPPs. The revenue of Rs 23,838 million is recorded net of amounts recovered by the Company from such other consumers.

Included in trade debts are amounts receivable from Government owned power generation companies and independent power producers of Rs 33,730,319 thousand (June 30, 2018: Rs 27,294,107 thousand) along with interest thereon of Rs 15,678,178 thousand (June 30, 2018: Rs 15,155,518 thousand) due to delayed payments. While trade and other payables (refer note 6) include an amount of Rs 197,741,875 thousand (June 30, 2018: Rs 138,142,072 thousand) due to Pakistan Petroleum Limited (PPL), Sui Southern Gas Company Limited (SSGCL), Oil and Gas Development Company Limited (OGDCL) and Government Holding (Private) Limited on account of gas purchases along with interest on delayed payments of Rs 36,675,727 thousand (June 30, 2018: Rs 24,770,686 thousand), interest on delayed payment of Gas Development Surcharge of Rs 4,101,732 thousand (June 30, 2018: Rs 4,101,732 thousand) is payable to Government of Pakistan, the settlement of these amounts is dependent upon the resolution of inter-corporate circular debt by the Government of Pakistan. Further an amount of Rs 170,676,556 thousand (June 30, 2018: Rs 122,176,517 thousand) is receivable from Government of Pakistan on account of differential margin. The recoverability of this amount is dependent upon settlement by the Government of Pakistan directly or indirectly inter alia including increase in future gas prices.

The management and legal advisor of the Company believes that the Company has reasonably good arguments in its favour and expects a favorable outcome.

The Company has also partially recovered the ToP amounts by encashment of Standby Letter of Credit of NPPMCL for a net amount of Rs 10,384 million and withdrawal of Rs 3,265 million from the Escrow Account of QATPL against the invoices raised under ToP arrangement. The net receivable balance as at period end amounts to Rs 10,189 million (June 30, 2018: Rs 3,529 million). The GPPs disputed the invoices under ToP arrangements on various grounds and filed a writ petition with the Honourable Lahore High Court (“LHC”). The LHC on June 22, 2018 directed that the disputed invoices should be dealt with in accordance with the dispute resolution mechanism available in the GSAs. In light of Section 18.1 of the GSAs, various attempts were made to settle this dispute by mutual discussions but the matter remained unresolved. As required under section 18.2 of the GSAs, the dispute has thereafter been referred to an Expert after mutual agreement of the parties involved on October 9, 2018 and the decision of the Expert is awaited.

13.2

13.1

14. LOANS AND ADVANCESLoans to employees - considered goodAdvances - considered good:- Employees- Suppliers and ContractorsAdvances to suppliers and

contractors - considered doubtfulLess: Provision for doubtful advances

186,353

1,115,993 1,579,457

3,227 3,227

- 2,881,803

169,024

630,375 461,546

3,227 3,227

- 1,260,945








Note

15. TRADE DEPOSITS AND SHORT TERM PREPAYMENTS

Trade deposits and short term prepaymentsLess: Provision for doubtful deposits

Add: Current portion of long term prepayments

224,596 (22,290)

202,306

229,976

432,282

126,588

104,298

121,914

226,212

(22,290)

16. OTHER RECEIVABLES

Less: Provision for doubtful recoverableExcise duty recoverable

- Differential margin recoverable

Gas swapping deferral account Due from customers

Current account with SSGCLOthers

122,176,517

- 1,438

17,132 143,075

122,338,162

1,438

17,211 16,852

16.2

108,945 108,945

-

108,945 108,945

12,057,824 RLNG Margin recoverable -16.1 1,046,269

16.1 RLNG differential margin

Opening balance Recognised for the period/year

Closing balance

(4,012,899)5,059,168

- -

1,046,269 -

The balance of RLNG Margin Account represents the aggregate difference between the margin earned by the Company from the purchase and sale of RLNG based on the notified rates and the RLNG margin guaranteed to the Company till March 31, 2019. The settlement of this amount is expected to materialize in the shape of adjustment to future sale price of RLNG by OGRA.

170,676,556

183,816,150

16.2 Gas swapping deferral account

Opening balance Recognised for the period/year

(2,640,675)24,234,038

21,593,363

(9,535,539)

12,057,824

- -

-

-

-

16.2.1



Note


16.2.2 RLNG margin on sale of stock to SSGCL

Closing balance

A gas swapping mechanism was allowed by the Economic Coordination Committee (“ECC”) of the Cabinet Division vide its decision dated May 11, 2018, which was endorsed by OGRA vide Final Revenue Requirement decision of the Company for financial year 2017-18 dated January 15, 2019 (FRR 17-18), for swapping of natural gas and RLNG for the purpose of gas load management. The necessary volumetric adjustments and financial impact is to be made on a cost neutral basis in the sale price of RLNG. The balance of gas swapping deferral account represents the difference of average cost of RLNG and the prescribed price of system gas (used by OGRA in determination of deferral account) of the swapped volumes. 31,635,680 MMBTUs of RLNG were sold as Indigenous gas during the period ended March 31, 2019. This amount will be adjusted upon directional changes in gas swapping and / or tariff adjustments in future periods to be determined by OGRA.

During the period, OGRA vide its decision dated November 20, 2018, and further clarification dated February 04, 2019, directed that this stock to be sold to SSGCL on historical weighted average cost. Thereafter, SSGCL shall record sales as per relevant applicable OGRA notified rates. The gain / loss owing to the difference between the current and historical rates shall be passed on to the Company within a month of sale of RLNG stock by SSGCL to its consumers and is to be realised / adjusted in form of future price adjustments of the Company's RLNG consumers.

16.2.1

16.2.2


AuditedJune 30,

2018

Un-auditedMarch 31,

2019

Note

(Rupees in thousand)17. CASH AND BANK BALANCES

Deposit accountsCurrent accounts

Cash in hand

5,647,162 1,072,759

6,719,921 13,571

6,733,492

5,821,947 1,248,816

7,070,763 4,270

7,075,033

17.1

Included in deposit accounts are amounts deposited by the Company in separate bank account(s) for funds released by the Government as grant, to finance the distribution development projects, being the Government share of cost. Withdrawal from this account(s) is made on periodic basis to the extent of projects approved and sanctioned therefrom and until then, these funds amounting to Rs 5,401,363 thousand (June 30, 2018: Rs 5,426,673 thousand) are not used for the normal treasury operations of the Company. Any profit earned thereon is credited to the funds instead of accounting for as Company’s income.

Un-auditedUn-auditedMarchMarch

31, 20193 , 201 19

39,109,130

156,018,980

11,570,503 (29,667,524)

Un-auditedMarch

31, 2018

Quarter ended

Un-auditedMarch

31, 2018

Nine months ended

18. GAS SALES

Gross sales - Indigenous gasGross sales - RLNG

40,134,721

134,848,650

(7,237,553) (10,105,262)

160,383,949

556,090,564

(22,800,743) (44,045,451)

127,563,365

335,482,656

(19,333,516) (22,632,223)


116,909,850 94,713,929 395,706,615 207,919,291

Sales tax - Indigenous gasSales tax - RLNG

(18,097,021) (17,342,815) (66,846,194) (41,965,739)

489,244,370 137,921,959 117,505,835 293,516,917

19. DIFFERENTIAL MARGINS Differential margin on indigenous gas Differential margin on RLNG

18,027,976 43,758,049(2,248,468) 533,266

15,779,508 44,291,315

19,878,773 1,647,025

21,525,798

48,500,038 5,059,168

53,559,206

82,812,828 63,338,634 346,694,016

-

492,845,478

36,123,218 22,185,901 102,600,531

-

160,909,650

18,839,413 17,118,929 86,086,392 6,717,702

128,762,436

- Southern system - Northern system - RLNG - Cost equalization adjustment

54,079,582 61,302,190 192,771,287 10,275,752

318,428,811

8,064,206 20. COST OF GAS SALES

Opening stock of gas in pipelines 18,386,199 31,404,569 10,270,890 Gas purchases

- Gas swapping deferral account (24,234,038) (18,293,503) - -

500,016,009 150,680,353 147,148,635 328,699,701

1,852,041 6,727,847

1,367,058 25,094,723

4,089,851 6,727,847

3,328,813 25,094,723

Less: Gas internally consumed Closing stock of gas in pipelines

8,579,888 26,461,781 10,817,698 28,423,536 25,489,824 8,984,967 8,524,873 22,748,879 Distribution Cost

514,688,135 151,085,432 129,211,727 323,025,044

17.1


6,628,486

1,123,562 113,610

8,148,646

2,953,087

32,552 118,395

3,189,506

1,795,170

688,253 233,982

3,121,634

2,931,943

1,566,229 422,901

5,648,643

21. OTHER OPERATING INCOMEIncome from financial assetsInterest income on late payment of gas bills- Interest income on late payment of gas bills - other consumer

- Government owned and other power generation companies

- Fertilizer and cementGain on initial recognition of financial liabilities at fair valueInterest on staff loans and advancesReversal of provision for doubtful debtReturn on bank deposits

3,762 1,254 1,528 4,584

58,415 19,638 16,118 43,984 - - 309,013 444,180

220,811 64,580 77,570 234,822

3,455,565 1,266,095 1,621,466

47,558 171 1,842 36,333

1,419,236 520,230 733,720 1,670,071 1,984,438 744,984 885,428 2,138,615

3,848,871

Income from assets other

Net gain on sale of fixed assets

Meter Rentals and service income Amortization of deferred credit Insurance claim 4,333 710 476 3,852

than financial assets

78,493 374,873 48,715

- 69,712 37,940

(1,022) 52,065

-

86,913 108,163 54,500

Sale of tender documents Sale of scrap Liquidated damages recovered Gain on construction contracts Non delivery charges recovered Bad debt recoveries Urgent Fee for new meter connections Miscellaneous

237,503 - - - 2,365 1,096 3,444 8,396 425,971 176,104 204,325 710,919 20,848 6,990 2,453 17,957

Other

6,022 2,596 3,145 6,942

1,194,790 294,438 264,410 993,790

12,799,001 4,750,039 5,007,510 10,491,304

Un-auditedUn-auditedMarch 31, 2019March 31, 20 19


Quarter endedUn-audited

March 31, 2018

Nine months ended


22. OTHER OPERATING EXPENSES

Workers' Profit Participation FundExchange loss on gas purchasesLoss on initial recognition of financial assets at fair value

Included in finance cost is an amount of Rs 12,194,261 thousand (March 31, 2018 :Rs 2,818,751 thousand) in respect of late payment surcharge on account of overdue payables for gas purchases.

23.

156,699

13,017

159,489

36,118

599,056

31,109

452,208

86,178

349,043 465,267 1,589,258 1,099,948

2,219,423 518,759 660,874 1,638,334

580,972 327,945 908,917

-

908,917

Current tax Deferred tax

(505,044)

1,482,590 1,633,853 3,116,443

2,611,399

Current tax Prior period

Un-auditedUn-auditedMarch 31, 2019March 31, 2019


Quarter endedUn-audited

March 31, 2018

Nine months ended

24. TAXATION(Rupees in thousand)

740,890 130,690 871,580

-

871,580

2,625,208 937,394

3,562,602

3,562,602

-


25. CASH GENERATED FROM OPERATIONSProfit before taxationAdjustment for non-cash charges and other items:Depreciation - Owned assets Amortization of intangible assetsEmployee benefitsAmortisation of deferred creditFinance costReturn on bank depositsGain on sale of fixed assets Provision for doubtful debts Reversal of provision for doubtful debts Loss on initial recognition of financial assets at fair valueGain on initial recognition of financial liabilities at fair value

Amortisation of difference between initial and maturity amount Working capital changes

14,164,475 69,057

1,524,717 (1,984,438) 17,422,058 (220,811) (47,558) 932,089 -

(3,762)

(31,797)

1,236,331

Un-audited Un-audited

March 31, 2019 March 31, 2018

8,591,950

12,419,969 39,542

2,369,570 (2,138,615) 6,393,637 (234,822) (36,333)

(444,180)

86,178

(4,584)

(24,641) (12,446,627)

14,571,044


-

31,109

11,382,054

(42,000,862)

Note

25.1

25.1 Working capital changes

(Increase) / decrease in current assetsStores and spares partsStock-in-tradeTrade debtsLoans and advancesTrade deposits and prepaymentsOther receivables

Increase in current liabilities Trade and other payables

25.2 Cash and cash equivalentsCash and bank balancesShort term running finance

(903,484) 24,676,722

(63,704,832) (1,603,529) (206,070)

(66,968,662)

(108,709,855)

66,708,993

6,733,492 (23,904,814)

(17,171,322)

128,229 (14,823,833) (12,934,335) (136,369) (237,426)

(66,612,352)

(94,616,086)

82,169,459

(12,446,627)

6,429,278 (3,997,971)

2,431,307

26. INCORPORATION OF TARIFF REQUIREMENTS

26.1 OGRA vide its decision dated June 21, 2018 on the Estimated Revenue Requirement ('ERR') of the Company for the year 2018-19 decided in consultation with the Federal Government and other licensees in the natural gas sector to revise the tariff regime including the rate of return which is to be based on Weighted Average Cost of Capital ('WACC') from the financial year 2018-19 in place of the existing rate of return of 17.5% of the average operating assets. Weighted Average Cost of Capital ('WACC') was computed at 17.43% for financial year 2018-19 and onwards, however, the same will automatically reset if the reference figure changes by ±2%. As per the revised tariff regime, the Company is required to earn an annual return of not less then Weighted Average Cost of Capital ('WACC') on the value of its average fixed assets in operation (net of deferred credit), before corporate income taxes, interest and other charges on debt and after excluding interest, dividends and other non operating income and befor incorporating the effect of efficiency benchmarks prescribed by OGRA.

(42,000,862)




Period end balances

Receivable from related parties

Payable to related parties

66,111,636

289,747,546

25,566,781

207,203,045

27.2

27. TRANSACTIONS WITH ASSOCIATES AND RELATED PARTIES

Transactions during the period



186,974,450 2,771,843 350,584,451 29,811 27,110 181,553 3,999 200,182 18,694

351,611 1,600,074

2,229,943

36,139,246 11,531

98,159,084 37,988 13,528 168,606 2,480 243,815 23,203

2,125,205 333,542

2,458,305

2,663,936

27.1Gas salesPurchase of materialsPurchase of gasService chargesProfit received on bank depositsTransportation chargesTransmission chargesInsurance expensesInsurance claims receivedDividend paidContributions to defined contribution plansContributions to defined benefit plansRemuneration and benefits paid to key management personnel



28. EVENTS AFTER THE BALANCE SHEET DATEThe Board of Directors of the Company in its meeting held on July 24, 2019 has proposed an interim cash dividend of Rs Nil per share (March 31, 2018: Nil), amounting to RsNil (March 31, 2018: Rs Nil) for the year ended June 30, 2019.

29. CORRESPONDING FIGURES In order to comply with the requirements of International Accounting Standard 34 - 'Interim Financial Reporting', the condensed interim statement of financial position and condensed interim statement of changes in equity have been compared with the balances of annual audited financial statements of preceding financial year, whereas, the condensed interim statement of profit or loss, condensed interim statement of comprehensive income and condensed interim statement of cash flows have been compared with the balances of comparable period of immediately preceding financial year.

Corresponding figures have been rearranged and reclassified, wherever considered necessary, for the purposes of comparison and to reflect the substance of the transactions. Following major reclassification has been made during the period:

Description Reclassified

From ToRupees in thousand

Differential margin on RLNG Gas sales Differential margins

533,266

GENERAL

Figures have been rounded off to nearest thousand of rupees, unless otherwise stated.

30.

DATE OF AUTHORISATION FOR ISSUE

These condensed interim financial statements were authorized for issue on July 24, 2019 by the Board of Directors of the Company.

31.

-

During the period, the Company could not meet the benchmarks prescribed by Oil and Gas Regulatory Authority (OGRA) and as a result the return for the period on the aforesaid basis works out to be 13.22% (March 31, 2018: 11.81%). Among other disallowances, the Company has also incorporated the effect of Unaccounted for Gas (UFG), which represents the volume difference of gas purchases and sales, amounting to Rs 4,387,325 thousand (March 31, 2018: Rs 5,523,351 thousand), which is in excess of the UFG benchmark of 6.991% as determined by OGRA in Final Revenue Requirements (FRR) for FY 2017-18.

26.2




corporate information · 2019. 7. 30. · syed dilawar abbas chairman mr. manzoor ahmed chairman...

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